from the you-did-it-to-yourself dept

Sinclair Broadcast Group's $3.9 billion merger with Tribune Media has reached an inauspicious end. Tribune has formally announced that it's not only terminating the planned merger, but will be filing a lawsuit (pdf) against Sinclair for what the company states was an "unnecessarily aggressive" sales pitch to FCC regulators and the DOJ. According to Tribune, it's hoping to recoup its losses and "hold Sinclair accountable" for causing the companies' controversial merger to implode:

"In light of the FCC’s unanimous decision, referring the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable timeframe, if ever,” said Peter Kern, Tribune Media’s Chief Executive Officer. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable."

As it stands, law prohibits any one broadcaster from reaching more than 38% of U.S. homes, a rule designed to protect local reporting, competition and opinion diversity from monopoly power. The Sinclair deal would have given the company ownership of more than 230 stations, extending its reach to 72% of U.S. households. Critics charge Sinclair attempted to skirt around this limit by trying to offload numerous stations to Sinclair-linked companies and allies, some of which had absolutely no broadcast experience, with an eye on simply re-acquiring them later at bargain-basement prices.

If you've watched the viral Deadspin video or John Oliver segment on Sinclair's creepy, facts-optional "news" reporting, you should have a pretty good idea why the merger was so controversial. It was, effectively, an attempt to dominate local broadcasting and fill the airwaves with what many have argued is little more than Trump-friendly disinformation.

Sinclair's efforts were buoyed by Ajit Pai's FCC, which had spent the better part of the last year attempting to neuter media consolidation rules in order to grease the skids for the deal. That included eliminating rules requiring a broadcaster have a physical local office, restoring obscure, un-needed regulations specifically to aid Sinclair's bid to limbo under media ownership rules (odd for a guy that endlessly whines about "unnecessary, burdensome regulations"), and even contemplating elimination of the media ownership cap entirely, authority the FCC doesn't actually have.

While the FCC tried to claim that the carefully-coordinated and times skid greasing was all just quirky happenstance, the effort was so blatant that it resulted in an ongoing FCC investigation into potential corruption and coordination by Pai. That investigation, in turn, likely helped contribute to Pai's about face on the deal, given it's abundantly clear that the agency head has post-FCC political ambitions (though his attacks on net neutrality may have something to say about that).

Granted while the deal is dead, the regulatory and market dysfunction that birthed it remains. And the massive FCC erosion of decades-old media consolidation rules also remains, paving the way to potentially even worse deals waiting just over the horizon.

from the not-particularly-shocking dept

If you watched FCC boss Ajit Pai's rushed repeal of net neutrality there really shouldn't be any question about where Pai's loyalties lie, and it certainly isn't with smaller companies, healthy competition, transparency, openness, innovation, or American consumers. The agency head repeatedly lied about the justifications for the repeal, casually using fabricated data to justify what may just be the least popular policy decision in this history of modern technology. Pai's fealty to giant monopolies runs so deep, his agency now just directs reporters to lobbying talking points when they question the flimsy logic propping up the repeal.

"Last April, the chairman of the Federal Communications Commission, Ajit Pai, led the charge for his agency to approve rules allowing television broadcasters to greatly increase the number of stations they own. A few weeks later, Sinclair Broadcasting announced a blockbuster $3.9 billion deal to buy Tribune Media — a deal those new rules made possible.

By the end of the year, in a previously undisclosed move, the top internal watchdog for the F.C.C. opened an investigation into whether Mr. Pai and his aides had improperly pushed for the rule changes and whether they had timed them to benefit Sinclair, according to Representative Frank Pallone of New Jersey and two congressional aides."

Sinclair's $3.9 billion acquisition of Tribune Media has already faced broad, bipartisan opposition by those concerned that the merger will dramatically damage both competition and opinion diversity across countless markets nationwide. The Sinclair Tribune tie up would give Sinclair ownership of more than 230 local broadcast stations around the nation, allowing it to reach 72% of the public with "reporting" frequently lamented as grotesquely distorted on a good day.

Sinclair's latest merger couldn't occur without Pai's decision to gut numerous media consolidation rules over the last few months, including several decades old rules specifically designed to prevent any one company from unfairly dominating a media market and crushing local competition. Unsurprisingly, consumer groups were quick to seize on the news suggesting that the agency should suspend its review of the merger until the Inspector General inquiry is complete:

"Until the inspector general’s investigation is complete, Chairman Pai and any other FCC staff subject to this inquiry should recuse themselves from all dealings related to Sinclair’s proposed takeover of Tribune Media," Free Press Senior Counsel Jessica J. González said in a statement. "If the investigation finds that Pai or any other FCC staff did indeed let their own bias and favoritism shape decisions related to the deal, they must not be permitted to vote on this matter and they should be subject to other appropriate ethics-review processes."

Of course if you're familiar with Pai's work, you know that won't be happening, and in Pai's ideologically-blinded brain this will all be dismissed as the errant rantings of partisans. But again, opposition to this deal is fairly uniform across the spectrum. Conservatives don't like it because they realize Sinclair is going to squeeze smaller media outlets out of the equation unfairly. Liberals don't like it because they know Sinclair is going to fill the airwaves with more nonsense just as we're trying to get a hold on problems inherent in foreign influence, disinformation, and discourse quality.

Regardless, Pai's going to have a very busy few years. He's already facing several different inquiries into why his agency made up DDOS attacks and turned a blind eye to identity theft as part of an apparent attempt to downplay massive public opposition to his policies. He's also facing several law enforcement inquiries (one of which he's actively blocking) and numerous lawsuits into his agency's blatant disregard of the public interest. And while this particular inquiry may not conclude that Pai technically broke the law or violated agency rules, it's pretty hard to act confused about where Pai's loyalties truly lie.